Shipping and oil demands declining, while unemployment and poverty rates increasing seem to be alarming signs of a new global recession.
The Poverty
This year, the amount of people living under the poverty level and having poor access to food has increased considerably. Though global GDP has risen by 60% since 1992, some certain parts of the world have recorded no growth at all.
People in the areas are threatened by drought, flood and food prices. “Rising food prices have driven an estimated 44 million people into poverty in developing countries since last June.” the World Bank reported early this year.
Many of the poorest nations should expand their farming capacity that could be a source for machinery and seed demand elsewhere
Shipping
Shipping is an important indicator of global financial health because it transports many of the world’s goods from crude oil to autos and agricultural products.
However, industry giant AP Moller-Maersk recently said that earnings and demand decreased deeply. The latest data about dry bulk commodities-shipping costs also showed rates have declined by a third so far this year.
Demand for the movement of goods from nations to nations declined considerably
Oil Demand
OPEC cut forecasts for oil demand and made its prediction that “Concerns over debt levels in Europe and the U.S., and signs of slowing economic growth in China and India, have spooked the market and raised fears in some quarters of a double-dip recession.”
In the Monthly Oil Market Report, the IEA stated, “For the first time since March 2009, China’s monthly apparent demand contracted on an annual basis, falling by 1.5% in June.”
WTI crude has recently dropped from $105 a barrel to under $80
Stock Markets
The stock indexes in major countries have recently dropped. For example, the Dow Jones Industrial Average and other major indexes in the U.S. have decreased 15%, the Nikkei in Japan was down more than 10% in the past month, and Hong Kong’s Hang Seng declined over 10% in the last month.
The stock markets’ signals show that the slowdown has spread among the developed world
Unemployment
Unemployment problems have been widespread throughout a number of large countries. In the developed world, the economies with the biggest debt problems tend to have the highest unemployment rates. The level is 21% in Spain, 15% in Greece, and 14% in Ireland.
The unemployment has become a common concern of many countries in the world
Government Spending Cuts
Economic expansion mainly depends on the government spending, but many countries have cut their budgets, instead of increasing spending. It is the eurozone financial crisis that makes Greece, Portugal, Italy, Spain and the UK have all cut or pledged to considerably cut government spending to carry out austerity programs.
The U.S. has started a similar process as the European countries
USA Unemployment Rate Rises to 9.2% in July 2011
Related links:
Twelve Alarming Facts That The World Is Running Out Of Food
Top Ten Countries That Have The Most Millionaires
World’s Worst Central Bankers 2011
About the Author:
Jolie Crussel, an economic expert, is keen on analyzing the economic situations in the world. Currently, she often delivers lectures on economic solutions to students and provides advice for many firms.
Articles Source: Six Alarming Signs of a New Global Recession